The last decade saw a mad clamour from all and sundry to either predict or proclaim the death of advertising. While all this has been pretty harrowing and depressing for all in the business, it has also been confusing. Confusing, since while all this high decibel grave dancing was happening, there were more and newer believers and users of advertising.

Advertising is not dying. The advertising agency model is.

And holding companies have a lot to answer for.

The last decade also saw a reckless and irresponsible flurry of over-priced and under-integrated acquisitions. This has resulted in bloating up holding companies with disparate agencies with diverse specialisations and competencies strung together in the tentative hope that all would work together, seamlessly and joyously.

Little surprise that in most cases, the specialist companies ran as silos; in many cases as independent silos! And this is what I believe, is fundamentally wrong with holding companies – they are today a federally structured, motley crew of super specialised companies with too much autonomy and too little pressure to be on the same production line.

Let me also address the elephant in the room here. The independence of a specialized agency post acquisition, is often inversely proportional to the acquiring company CEO’s comfort and interest in the domain/specialization of the acquired agency; while often being directly proportional to the stature of the acquired agency’s Founder!

A holding company probably believes that it has a complete portfolio of offerings for all that a brand needs, or should need. This belief is predicated on 2 huge assumptions – firstly, that the portfolio companies will work together seamlessly and towards a single cause and secondly, clients will be willing to work with so many different companies just because they are all part of the same holding company. The truth couldn’t be farther for the second too. Marketing teams are getting leaner. They do not have the time or the inclination to be wanting to, or having to work with so many agencies. The only reason some clients are willing to do so is because of their frustrated realization that their creative agencies are under-equipped at worst and partially equipped for all that is needed for a consumer’s journey on a brand today.

Can’t really blame the creative agencies. They were never mandated nor allowed by their holding companies to be full-service in competency, offering or mind-set.

Many are only too aware of the frustration of many country and network creative agency CEOs when they go to the Holding Company with a request to either build a new competency or acquire one - the standard response would be why would you want to duplicate, given that the holding company already have these specializations in its roster.

This in my personal opinion, has been the principle reason for the increasing irrelevance of advertising agencies. They have been made to dig deeper into the hole of traditionality because all the new sexy stuff was being done by the silo specialists in the holding company empire. And if they did not exist in the holding company portfolio, they would be hastily acquired.

In 2012, a couple of years after I had taken over as CEO of the Lintas Group, I remember being asked by a journalist, what the future of the advertising business was; and I had told her then that I believed that agencies should be getting back to being full service agencies; what after almost 20 years of an arguably detached existence from most of the relevant touch points in a consumer’s journey. I told her then, that there could eventually be 5 types of full-service advertising agencies; and that they would all co-exist. The aggregate offerings of each could be more or less the same, but the driving nucleus of each of these 5 would be different from each other. And that’s what would determine and define each of these full-service agency’s unique approach, culture, competencies and talent. The 5 nuclei i had mentioned then were Storytelling, Media & Digital, Consulting & Design, PR & Events and Publishing & Technology.

It is like a auto manufacturer who has a portfolio of car brands. Each car brand in the portfolio is complete in itself, yet distinctly different from each other. Different customers will choose from the different brands within that portfolio, depending of what he or she is looking for.

So what do I believe holding companies need to be doing? Have a portfolio by all means, but each agency in the portfolio needs to be fully and self-sufficiently equipped to address all that brands of today need. I would rather that a holding company have a portfolio of 10 differently “nucleused” full-service agencies than a portfolio of 5 creative agencies and 25 specialised agencies. A federal structure in this scenario however is not just desirable, but a necessity. Also things are easier when you have to drive intra-collaboration than inter-collaboration.

Ofcourse advertising agencies need to be re-structured and re-purposed.

But holding companies hold the key to this.

The writer is co-founder of an independent advertising company, Tilt, and former chief of Lintas Group. Views expressed are personal.